How do I search for lawsuits against a business before buying it?

A lawsuit search has two parts that check each other: what the seller tells you, and what public court records show. Neither is complete alone. The seller knows about letters and threats that no court has seen, and the court records show filings the seller may have forgotten. Run both, in that order, and compare them.

Ask the seller first

Ask for a written list of every claim that is pending, threatened or settled, with the pleadings, demand letters, lawyers’ letters and any insurer correspondence. Ask separately about complaints to a tribunal or government office, such as a human rights or employment standards complaint, because those may not appear in a court file. A dispute that never reached a court will not show up in a court search.

Search the court files

This page covers Ontario and British Columbia only. In Ontario, section 137(1) of the Courts of Justice Act entitles a person, on payment of the prescribed fee, to see any document filed in a civil proceeding in a court, unless an Act or a court order provides otherwise, and the Superior Court’s civil page points to its case information search. In British Columbia, Court Services Online eSearch covers Provincial and Supreme Court files from 1989 onwards. Depending on a file’s access restrictions, it shows details such as the file number, type of file, names of parties and counsel and the list of filed documents; for a file subject to a judicial order restricting access, it shows the style of cause, file number and date the file was opened, but no further details. Search the corporation, its former and trade names, and the owners, in each province where the business operates. Ask your lawyer which court service applies elsewhere.

Published decisions

A decision database can only show cases that reached a published decision. Ask whether a claim that settled, or one still waiting for trial, would appear there at all. Treat a database search as a supplement to the file search, and ask your lawyer which research tools they use. The litigation search entry explains the file search itself.

What a clean result cannot tell you

A search cannot find a claim nobody has filed. Ontario’s Limitations Act, 2002 says that, unless the Act provides otherwise, a proceeding shall not be commenced after the second anniversary of the day on which the claim was discovered (section 4), and that there is no limitation period for an environmental claim that has not been discovered (section 17). So a claim can be filed after closing. Ask for the seller’s written statements about known and threatened claims, and see what to do if a seller hid a pending lawsuit. This section describes Ontario’s Act only; ask your lawyer which limitation rules apply where the business operates.